Brits flock to Aldi in the run up to Christmas

As inflation hits a four-year high, the latest grocery market share numbers from Kantar Worldpanel suggests the German discounters could be the biggest winners this Christmas.

Aldi reclaimed its crown as Britain’s fastest growing supermarket during the 12 weeks to 3 December, according to the latest data from Kantar Worldpanel.

The German discounter grew sales by 15.1% year on year, ahead of Lidl’s 14.5% sales growth. In comparison, Tesco, Sainsbury’s, Asda and Morrisons grew sales at far slower rates of 2.5%, 2%, 1.4% and 1.2% respectively. Each of the big four also lost market share, with the data strongly indicating Brits are readying themselves for a more budget Christmas.

However, Tesco will still take heart from the numbers, with it growing sales faster than its direct rivals and remaining Britain’s most-visited retailer, having welcomed 21 million households during the latest quarter.

Like-for-like grocery inflation now stands at 3.6%, its highest level since 2013, which could also be leading more people to consider the discounters, according to Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

READ MORE: Brits’ hunger for major purchases plunges just before Christmas

“Aldi saw notable successes in the chilled aisle, increasing sales of convenience products like ready meals and desserts by an impressive 40% year on year,” he adds. “Aldi’s ‘Specially Selected’ line was the UK’s fastest growing premium own label brand during the past 12 weeks, enjoying a healthy sales increase of 25%.”

The Kantar Worldpanel numbers come as inflation hits its highest level in almost six years. The consumer prices index rose by 3.1% in the 12 months to November, the highest level since March 2012 and away from the Bank of England’s 2% target.

Air fares were the biggest factor behind the jump, according to the Office for National Statistics. And according to Richard Lim, CEO of Retail Economics, this is depressing news for retail brands.

He concludes: “Inflation is likely to have peaked which has come at precisely the wrong time for retailers.

“In the run-up to Christmas, the cost of living, now rising at the fastest rate in five years, remains uncomfortably high for households. Food inflation is at a four-year high and for many families, this is one of the most transparent indicators of living costs and often the catalyst to cut back on spending elsewhere.”